Doctor Debt - Debt Management Solution

Debt Management Solution

The various pages of this site have described different debt management programs and what they involve. On this page, however, we will explain the possible side effects of finding a debt management solution.

Finding a Debt Management Solution

You might be able to guess which debt management solution is right for you just from reading brief descriptions on other pages on this site. In case you haven't read them, here's another quick rundown, complete with a list of possible side effects:

Debt Consolidation - A debt management solution that involves negotiation to get your unsecured debt balances and interest rates lowered. Then the new, lower balances are combined and you make one monthly payment to the debt consolidation company, which they distribute to your creditors. Aa a result, you can become debt free in about five years.

Possible side effects: If not combined with credit counseling, your debt condition could return.

Debt Consolidation Loan - A low-interest debt management program given to you to pay off your unsecured debts. You pay off your unsecured debts immediately, but you still have the loan to pay back. The benefit is that the interest rate on the loan is so much lower that you can have it paid off in five years or less.

Possible side effects: The same as with debt consolidation.

Debt Consolidation Mortgage - A debt management solution that allows you to borrow from the equity in your house to pay off your unsecured debts. Your payment is combined with your mortgage, so you get the same interest rate as your mortgage.

Possible side effects: If you fail to make your payments, you could lose your house. In addition, you won't have the debt paid off until your house is.

Student Loan Debt Consolidation - A debt management solution that combines all of your outstanding student loans into one and locks in a much lower, fixed interest rate for you.

Possible side effects: To get your your monthly student loan payments cut in half, the repayment period is extended.

Debt Settlement - Allows you to pay off your debts at 30-50 cents on the dollar. Generally, you have to have the money all at once, but some debt management companies will give you one to three years to pay it off.

Possible side effect: Could appear on your credit report in a negative manner.

The only way you'll find the right debt management solution for you is to talk to someone at a debt management company about your situation. And there are plenty of debt management services out there to choose from. Just do an Internet search on and see for yourself. But don't just choose the first company that pops up. You need to do some research, just as you would with any important financial decision. Make sure the companies you are most interested in are nationally certified and accredited. Make sure they have a physical street address, not just a post office box. Make sure your creditors are willing to work with them. And make sure they are ready and willing to answer any questions you have. Then you'll be armed with the information you need to choose the right debt management solution.